Ukraine Talks End in Accord; What About the Key Missing Player?

Bloomberg reports Treasuries Fall Most in a Month as Ukraine Talks End in Accord

Treasuries fell, pushing 10-year note yields up the most in a month, as talks on the crisis in Ukraine ended with an accord aimed at de-escalating the conflict, damping haven demand.

Talks in Geneva between Russian Foreign Minister Sergei Lavrov, his Ukrainian counterpart, Andriy Deshchytsia, U.S. Secretary of State John Kerry and Catherine Ashton, the European Union’s foreign-policy chief, went on for more than six hours, longer than scheduled.

"The Geneva meeting on the situation in Ukraine agreed on initial concrete steps to de-escalate tensions and restore security for all citizens,” the four said in a joint statement. “All sides must refrain from any violence, intimidation or provocative actions.”

Text of the Joint Statement

Here is the complete Text of Joint Statement on Ukraine

The Geneva meeting on the situation in Ukraine agreed on initial concrete steps to de-escalate tensions and restore security for all citizens.

All sides must refrain from any violence, intimidation or provocative actions. The participants strongly condemned and rejected all expressions of extremism, racism and religious intolerance, including anti-semitism.

All illegal armed groups must be disarmed; all illegally seized buildings must be returned to legitimate owners; all illegally occupied streets, squares and other public places in Ukrainian cities and towns must be vacated.

Amnesty will be granted to protesters and to those who have left buildings and other public places and surrendered weapons, with the exception of those found guilty of capital crimes.

It was agreed that the OSCE Special Monitoring Mission should play a leading role in assisting Ukrainian authorities and local communities in the immediate implementation of these de-escalation measures wherever they are needed most, beginning in the coming days. The U.S., E.U. and Russia commit to support this mission, including by providing monitors.

The announced constitutional process will be inclusive, transparent and accountable. It will include the immediate establishment of a broad national dialogue, with outreach to all of Ukraine's regions and political constituencies, and allow for the consideration of public comments and proposed amendments.

The participants underlined the importance of economic and financial stability in Ukraine and would be ready to discuss additional support as the above steps are implemented.

Defusing the Conflict

The Guardian reports Geneva talks produce agreement on defusing conflict.

The US, Russia, Ukraine and the European Union have agreed a plan aimed at defusing the gathering conflict in eastern Ukraine.

At a meeting in Geneva which began with low expectations but led to seven hours of intense negotiations, foreign ministers agreed a series of "concrete steps" to be taken by all sides. The agreement puts on hold for now at least additional economic sanctions against Russia.

The US secretary of state, John Kerry said the agreement "represents a good day's work" but would have little meaning if it was not followed by action on all sides to calm the situation. He said if the US and EU did not see progress, new sanctions would follow.

The success of the agreement will depend on its implementation. Kerry made it clear that the US would hold Moscow responsible for controlling the pro-Russian protesters, who Putin has portrayed as independent minded Ukrainians.

Lots of Questions

This accord raises more questions than answers.

• Did anyone consult the separatists?
• Who is going to enforce the agreement?
• Is there a single voice, or even a small group of voices who can speak for the separatists?

If the separatists are acting on their own, then unless Russia or someone else can convince the separatists to lay down their arms, the accord may break down.

Separatists are the key players in this crisis, but it does not appear they were even invited to the table.

In the meantime, let's see if it holds. It might. And if it does hold, then Russia probably got what it wanted out of the agreement.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com